Numerous public banks in India offer education loans for both local and international studies. In this blog post, we will delve into the details of education loans for overseas education provided by two major public sector banks: the State Bank of India (SBI) and the Union Bank of India (UBI). By examining these options closely, you can gather the necessary information to make a well-informed decision.
Meaning of education loan
Education loans serve as essential assistance for students aspiring to pursue higher education abroad, being offered by banks and financial institutions at favorable interest rates. Opting for studies at esteemed international universities brings forth numerous opportunities but often entails a substantial financial commitment. The significance of education loans for overseas education becomes apparent as they play a pivotal role in facilitating students from diverse backgrounds to follow their aspirations and enroll in top-tier global universities.
Navigating through the multitude of options presented by various banks and lenders to choose the right education loan can be a daunting task. In this scenario, GyanDhan steps in to provide support, aiding students in identifying the most suitable education loan for studying abroad that aligns with their individual needs. This ensures a seamless and stress-free process for the approval of the loan.
Types of lenders
Here are essentially four types of lenders in India that can provide education loans for studying abroad. These include:
- Public Banks
- Private Banks
- NBFCs (Non-Banking Financial Companies)
- International Lenders
Overview of SBI and UBI
During the fiscal year 2021-22, among the 12 public sector banks facilitating education loans for Indian students pursuing overseas studies, there was a substantial disbursement totaling INR 7576 crore. Notably, the State Bank of India (SBI) emerged as a frontrunner in this effort, disbursing an impressive amount of INR 3556 crore specifically designated for abroad education loans.
Additionally, the Union Bank of India (UBI) also distinguished itself by securing a position in the top 5, having disbursed a noteworthy sum of INR 556 crore for the same purpose. This underscores not only the robust commitment of these public sector banks to supporting the educational aspirations of Indian students but also highlights the significant role played by SBI and UBI in providing financial assistance for pursuing education abroad.
Education loan by SBI
This comprehensive compilation presents crucial details about the State Bank of India (SBI) abroad education loan, offering an in-depth overview of key elements such as loan amounts, interest rates, fees, and various other terms associated with the loan. By delving into this information, prospective borrowers can acquire a nuanced understanding of the intricacies and specifics that define the SBI abroad education loan, enabling informed decision-making in the pursuit of their educational aspirations.
The loan amount options encompass a range from INR 7.5 Lakh to a substantial INR 1.5 Crore. The interest rate is set at 11.15%, featuring a floating rate structure, with female applicants enjoying a noteworthy 0.5% concession on the interest rate. A non-refundable processing fee is applicable, amounting to INR 10,000 + GST. To know more about this you can visit GyanDhan’s website.
Margin money requirements vary, with 15% for loans ranging from INR 7.5 Lakh to INR 20 Lakh, and 10% for amounts exceeding INR 20 Lakh. Property evaluation charges, approximately INR 7,500, are applicable, subject to potential changes based on location and property specifics.
The moratorium period spans the course duration plus an additional 6 months, providing financial flexibility for borrowers. The repayment tenure is extended, allowing borrowers up to 15 years to comfortably manage and repay their education loans.
Education loan by UBI
This comprehensive compilation provides essential insights into the Union Bank of India (UBI) abroad education loan, offering a thorough overview of critical elements such as loan amounts, interest rates, fees, and various other terms integral to the loan. Examining these details empowers potential borrowers to develop a nuanced comprehension of the intricacies and particulars defining the UBI abroad education loan. This knowledge serves as a valuable resource for making well-informed decisions and guiding individuals towards fulfilling their educational aspirations with confidence.
Loan Amount options include a secured loan up to INR 1.5 crore (expandable based on the student profile) and an unsecured loan capped at INR 40 lakh. The UBI Education Loan Interest Rate for secured loans ranges from 10-10.5%, while unsecured loans carry a fixed rate of 9.8%. A refundable processing fee of INR 5000 is applicable, provided disbursement occurs within 3 months of sanction.
Margin Money requirements include 10% for secured loans for listed universities, 15% for non-listed universities, and 15% for unsecured loans. The Moratorium Period extends throughout the course duration plus an additional 12 months. The Repayment Tenure stretches over 15 years.
Documents for submission
Applicant Documents:
- Identity proof (PAN/Passport/Aadhaar)
- Education loan application
- Address proof (Utility bill/Driving License/Aadhaar)
- Academic records, entrance results
- Admission letter, expense statement
- 2 passport-size photos
- Bank statements (applicant and loan A/C)
Co-applicant Documents:
- Identity proof (PAN/Passport/Aadhaar)
- Address proof (Utility bill/Driving License/Aadhaar)
- 2 passport-size photos
- Bank statements (last 6 months)
- Legal documents for collateral
- Income proof (Salaried: Salary slips, Form 16, Bank statement; Self-employed: Business proof, IT returns, Bank statement)
- Brief assets & liabilities statement
Public sector banks, like SBI and UBI, play a vital role in supporting education through loans for both domestic and international studies. SBI offers flexible loan amounts and extended repayment terms, catering to diverse needs, while UBI provides secured and unsecured options with reasonable interest rates. The importance of thorough documentation is emphasized in the blog, highlighting the crucial role of public banks in enabling educational aspirations and providing clarity to borrowers seeking academic excellence.
